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The spatial sorting and matching of skills and firms

Giordano Mion () and Paolo Naticchioni ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: In this paper we make use of a matched employer-employee database for Italy to look at the spatial distribution of wages. Using this rich database we aim to open up the black box of agglomeration economies exploiting the micro dimension of interaction among economic agents, both individuals and firms. We provide evidence that firm size and, especially, skills are sorted across space and account for a large portion of the spatial wage variation. Our data also support the assortative matching hypothesis, which we show not to be driven by co-location of good workers and firms. Finally, we point out that assortative matching is negatively related to local market size.

Keywords: spatial externalities; individual panel-data; skills; firms’ heterogeneity; sorting; assortative matching (search for similar items in EconPapers)
JEL-codes: J31 J61 R23 R30 (search for similar items in EconPapers)
Date: 2009
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Published in Canadian Journal of Economics, 2009, 42(1), pp. 28-55. ISSN: 0008-4085

Downloads: (external link)
http://eprints.lse.ac.uk/42670/ Open access version. (application/pdf)

Related works:
Journal Article: The spatial sorting and matching of skills and firms (2009) Downloads
Working Paper: The spatial sorting and matching of skills and firms (2007) Downloads
Working Paper: The spatial sorting and matching of skills and firms (2006) Downloads
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